Today is Wednesday, April 7th and the market finally got going today.
It was nice to see a bit of movement in the market today, signs of life, but to the downside. Many traders have a bias to the long side. It seems more natural to trade that way for many, but what do you do when you have days of downside action. In a bear market, you will only get occasional upside movement and possibly enough to get a modest goal, but the natural rhythm at those times are to the downside, short. Do you just stay out, because you have not trained your mind to handle the inverse relationship of going short? It is true, most traders do find it easier to trade the long side of the market, but are you willing to settle for a huge segment of the market to be taken away from you, because you have not found out a way to adjust yourself.
I think not. If you feel more comfortable trading long positions, that is fine, but I say, start to work on yourself to change that, even if you currently don’t trade it right now. It is all about getting comfortable with the process. If you start looking and thinking as you will need to, in order to see the setups and pick your entries, you can learn to trade short just the same as long.
If you decide to go short for fear of missing a big move and have not trained for it, you could be at a big disadvantage. Why would you want to do that. If it takes 6 months or even one year, before you put on a short position, you can little by little look for the opposite of what makes up your buy signals and orders.
This might go along with yesterdays tips on trading but in a different area. Its just what came to mind after seeing today’s drop.
I did trade the late afternoon session. I had my first trade short as a loss for 3 ticks as I was just coming in for the session. I took a break right there and then, I missed the next leg down, but did happen to catch the last part of it, about 35 minutes later, +1.50 and +1.75 on larger size. In fact I doubled up for a big gain, no scaling. I got filled exactly on the bottom. A few minutes later I did go long for .75 point and then again had a few more winning trades. It was a good day for really only trading less than one hour. Today made up for no trading on Monday and Tuesday. I did post a U Tube video of the trades. You could see it through the video section of my website, top right hand corner if you want to or not.
I am taking a trip with my wife for the rest of the week. I don’t know that I will be trading, but I will play it by ear. I will probably post some comments in the evening about the day, so stay tuned. Tomorrow I will report on the Investor Intelligence Market Sentiment numbers. They were going up steadily over the last month and I would bet there was a good chance that it hit a bullish extreme on Tuesday. That is the day they take the weekly poll. I get the data two days late for free. Anyone interested in the checking for themselves can go to the resource page on my website and get the direct link. Non the less, I will report what it is in tomorrows post and give comments.
I don’t have my charts up right now, as I am writing this, but I remember, we were sitting on some key support, even though we were just at the years highs. The market would not be out of step if it pulled back from here. I will do a little more work on it for tomorrow and show what is going on in the daily charts, so we can get a sense of what to expect for the next week or two. Do not let your guard down, you don’t want to get popped. Just a word of caution.
I will be back tomorrow, until then good trading.
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